Evaluation on the Cost of Energy Transition: A Case Study of Fujian, China

The development of renewable energy in Fujian province has entered a bottleneck period in recent years. Considering the impact of COVID-19, how to formulate the provincial energy development strategy based on the 14th Five-year Plan is an important issue that need to be addressed for Fujian. This paper constructs a provincial Computable General Equilibrium model to analyze the cost of energy transition to renewable resources and tries to find a better pathway that integrated into account social efficiency and cost. The simulation results show that after the implementation of energy substitution, the actual electricity price will increase by about 1.6% and the electricity consumption in various sectors will also decrease, especially in the secondary industry. Overall, the marginal impact of energy substitution on the economy is significant.

Automated summary

This study focuses on the bottleneck period of renewable energy development in Fujian Province, analyzes the cost of energy transition through a Computable General Equilibrium model, proposes the changes in the electricity market after the implementation of energy substitution, and finds that it has significant impacts on the economy.